This Week In College Viability (TWICV) for March 10, 2025

It is March 10th, 2025, time for another podcast episode of This Week in College Viability News and Commentary. Hi everybody, Gary Stocker back again. I made time last week to go to the Ohio Valley Conference men's and women's college basketball tournament. It was a D1 tournament at the FCS level, for those of you that follow that. And while in— I enjoyed watching the basketball a lot, my Lindenwood University women's basketball team lost a heartbreaker in the championship game. Sad, but somebody's gonna win, somebody's gonna lose. It was an exceptional basketball game, just a pleasure to watch. The 3 days I was at the tourney, this was in Evansville, Indiana, it gave me kind of an in-depth perspective on college athletics I really hadn't seen for a long time. I saw players and parents and bands and cheerleaders and more, almost all wearing their respective cool school colors, their school colors, their coated garments, all those kind of things. I like sports. I really like college sports. It's clearly in my mind a cultural part of the college experience. Maybe more so a little bit at the larger colleges than many of the smaller ones. But, and it was touching. It was touching to see players hug their parents in the hotel lobby after both wins and losses. It was fun to listen and watch college bands form support lines in the hotel hallways for their team's players to walk through on the way to games. So you got to be asking, 45 seconds into the podcast, how does this— Gary, how does this tie in to higher education finances and operations? Well, we saw it with Sonoma State University in California a few weeks ago. They're eliminating every one, every single one of their NCAA Division II sports. College sports, as I'm guessing many of you know, are only financial winners at some, not even all, but some of the Power Four conferences— the Alabamas, Ohio States, maybe the USC, UCLA, those kind of places. And almost every other college uses athletics kind of as a loss leader to enroll more students, and there's absolutely nothing wrong with that. I will add though that athletic scholarships are almost always unfunded institutional grants. There are no actual dollars changing hands from one account to another.

It's just a discount.

But what happens? What happens when there are no longer sufficient dollars to pay coaches' salaries, rent the buses, pay officials, buy player meals and insurance, and, and so much more? What happens then? Sports is a big deal. Big deal in this country. And you can see that, I think, most prominently not on the big-time sports, but by looking, by witnessing the growth of youth sports over the past many decades. And many of those parents of youth athletes, whatever the sport is, make investments in buying teaching and coaching and travel teams and all that kind of stuff. They make that investment in youth sports with the usually unrealistic hope for a college scholarship. Nothing wrong with that either. If those opportunities for college athletic scholarships go away because of college budget challenges, college budget finances, I fear that the cascading impact of those losses are almost unimaginable.

It's too big of a topic to cover in one podcast episode, and I might, I might delve into this deeper on a future podcast.

So this week, what do we have?

The University University of Dayton. The University of Dayton cutting 65 combined faculty and staff positions.

There was an announcement last week of an interesting public college merger, proposed public college merger in New Jersey.

And St. Augustine's in North Carolina on its last, very last appeal to maintain accreditation. And then a Pennsylvania politician, because there's a lot of talk of closing regional publics in Pennsylvania, a Pennsylvania politician wants to make it harder to close those public colleges.

And I'll lead with a geez right off the top on that one. And as always, much, much more on this episode of This Week in College Viability.

Layoffs and cutbacks. The University of Dayton not renewing contracts of 45 faculty and 20 staff in a wave of cutbacks. This is a March 5th story by Carrie Caddell, the editor-in-chief at flyernews.com. Interesting, interesting data here. Just a little bit. Total revenue at the University of Dayton is up 28%. Not bad. Total expenses though are up 42%. And the source on both of those is the Perspective Data Science Advanced Financial Compass. And it does appear, you know, as I read the story on that, the good folks at the University of Dayton are taking good care of those 45 employees. It's still traumatic. It's still no fun. But it looks like the college is— the university is stepping up to take care of those folks.

College dribble.

D-R-I-B-B-L. College dribble. And here's, here's one again. I'm not going to name names for a college with only very limited options to keep its accreditation. And this is from a board of trustees person, and I'm going to read the quote. We have made substantial progress and are confident that our strengthened financial position and governance will ensure a positive outcome. This is in reference to an appeal. This college is resilient, and we are resolute in our commitment to academic excellence. I've covered this college before. Again, I'm not going to name it this time. I don't know why not, but as always, why As the last financial dollar circles the financial drain, why, why have you waited so long to do what you said you're doing here? And then they're not— there's no realistic scenario for this college to survive. Page 2: After losing millions and cutting costs, Harrisburg University's leader vows better days ahead. All right, they're spinning this, that's fine. That's— we've talked about that many times. Colleges spin stuff. And this is from, uh, PennLive in May— excuse me, March 7th, 2025 post by Mr. Charles Thompson of PennLive. And this one's behind a firewall, so I'm just going to go to the data for Harrisburg University. Leader for Harrisburg University. And the first data from them is my own College Viability App.

The 4-year graduation rate at Harrisburg University is about 20% on average over the last 8 reported years. 2 out of 10, 20 out of 100, 200 out of 1,000 who started at Harrisburg graduate 4 years later. Again, you've heard me say before, not even a college in my book. It's more a tuition collection agency. The enrollment is up about 200+ students. The graduate enrollment is also up. The unfunded institutional grants, you and I call those merit aid and most scholarships, is up from $4 million to about $9 million, so about $600,000, $700,000 a year, something like that. And the tuition and fees revenue is up $14 million, from $35 to $49 million. From Matt Hendricks' Advanced Financial Compass, the years 2016 to 2023, Harrisburg U net income margin went from +20, +20 to -30% from 2016 to 2023.

While the total operating revenue is up 40%.

Get this next part: total operating expenses are up 149%. That's 3 digits, 149, 149%. This looks to me like a college that never met an expense it didn't like.

Goodness.

And, and their endowment is not— is, is even less than college couch money.

So here's what I say. Here's that—

here's the Gary Stocker suggestion.

At Harrisburg.

If you must shrink now to survive, got to do it, especially on that expense side, up 149% over 6 years.

I've never seen that number before.

Shrink to survive now. Wait, wait it out. If you can shrink now to survive, wait it out to thrive, if at all possible, at a later date. New Jersey City University with declining enrollment to merge with Kean University. This is from Lucas Frau.

In NorthJersey.com on March 6th.

And the essence of this is two state universities, Kean University and New Jersey City University, voted to move forward with what was Kean University's proposal to combine the schools. Kean University proposed turning the two colleges into one university under the name Kean—

K-E-A-N—

Kean Jersey City University. And there are still many steps needed to be taken to finalize the merger, as both schools must, of course, begin the process of memorializing the terms and conditions of that potential merger.

Page 3, St.

Augustine University loses its appeal and pursues arbitration in a fight to keep accreditation. This is from the Episcopal News, David Paulson, on March 6th. They're exhausting their options. They had done the appeal, I think it was back in December of 2024, their accrediting agency that goes by the acronym SACSOC, S-A-C-S-O-C, the Southern Association of Colleges and Schools Commission on Colleges.

There's a mouthful. They're not meeting the accreditation standards, and they denied— the SACSOC denied St. Augustine's appeal release appeal on March 6th, according to a news release from SACSOC. They've got one more option.

The folks at St. Augustine have one more option.

A 90-day arbitration process as it attempts to remain an accredited university.

I don't like their odds for lots of financial reasons, let alone other reasons, including a very low 4-year graduation rate. And, you know, their board of chairman says we've made substantial progress and are confident that our strengthened financial position will ensure a positive outcome for the arbitration process.

Gary Stocker suggestions, you know, the equivalent of a loan from Grandma, which is kind of what they're talking about here. The equivalent of a loan from Grandma to stay open is, is many, many days late and many, many, many dollars short of what's needed for any kind of long-term financial viability for this college. So our politician gets in the way story this week: a Pennsylvania representative fights to make it more difficult for colleges to close regional branches. This is a story by Hannah Erdman on March 8th from WKBN Channel 27 TV. The story reads, one Pennsylvania lawmaker says it's unfair— okay, says it's unfair how Penn State University is looking to close multiple campuses across the state. This rep, Charity Krupa, from Fayette County in Pennsylvania, recently introduced new legislation that would give the public a voice All right, I guess nothing wrong with that. I'll talk about that here in a second. And of course, the Penn State is looking at closing something along the line of as many as 12 of its campuses. Many of those are located in rural communities, including one, and maybe it may be in Ms. Krupa's, Representative Krupa's territory region. And there are 3 parts. I'm gonna read each of the 3 parts focused on giving a voice to the public.

Because these are all public colleges. The first ensures publicly funded state-related universities cannot close branch campuses without legislative oversight.

I don't know what that means. And public input. All right, the second bill would do things like—

do things, okay—

do things like require a formal transition plan that ensures alternative options before a branch campus closes. I have no idea what that means. It would also introduce penalties for campus closures without approved plans— just a mess— and mandate legislative oversight of universities that close regional branches. I guess that's what politicians do. And the third bill wants to make sure that state-related universities cannot close branches without taking a look at the economic impacts. And this is of those those regions, including what it would mean for local businesses and workforces. Well, she used the word economics in that last part, but it's economics on the local regions. And of course it's not going to be good to close a college, which in many cases is the main employer and has all sorts of economic benefits. But Madam Representative, Representative Krupa— I hope I'm pronouncing that correctly— Look at the enrollment trends. Look at the finances. Look at the graduation rates of these colleges. Many are below, if not most, are below 50% over 4 years. And of course, as I have said many times, closures are traumatic. I know that. But name me one other industry in this country that has not undergone substantial consolidation, even in small non-urban communities over the last half century or even more. Page 4. Forbes always releases their college financial grades about this time of year, and they did it last week. And Emma Whitford is the reporter for Forbes, and here's how her story starts. And after the story, there's, there's all sorts of grade data for— I think it's about 800-plus private colleges throughout the country, all with enrollment greater than 500 students. Emma Whitford's lead starts with college administrators, often oblivious to economic realities— nice shot— often oblivious to economic realities, have spent more than a decade fretting about looming enrollment declines. She goes on to write in her intro, in her lead, that Trump's slash-and-burn approach to education and federal spending could hasten the demise of many teetering schools. She's not the first to say that. I'm not the first to say that. It's obvious. The remainder of Ms. Whitford's story is high on concern, really high on concern, and really low on hope for many, many, many private colleges. This is not new. This just reinforces the almost absolute chaos on the financial side of the higher education industry. Middle States, the Middle States accrediting agency, says Keystone College remains accredited Double jeesh right off the top. This is a story at WVIA by Roger Dupuis on February 28th, and I understand due process. I cannot and will not logically argue against due process for Keystone College and every other one, but I will make the case that looking at the data, the market is already telling Keystone College to go away. The creditors look and look at the same data I, I can. If not, drop me a note, I'll be glad to show it to you. Their 4-year graduation rate is around 40%. Their admissions yield is down 16 points from 29 to 13%, meaning more and more students, while getting accepted to Keystone, are choosing to go elsewhere. There's not a better market indicator than admissions yield. The percent admitted To Keystone is hovering around 80%. That doesn't quite get to my heartbeat admissions model of 85%, but it's close. The tuition and fee revenue is down $6 million from $18 million to $12 million. The total operating revenue is down 24%, but the expenses, the total operating expenses, just down 4%. The endowment at Keystone College is, is just college couch money at best. And in 6 of the last 8 years, their CapEx ratio is less than 1, indicating they're not providing a minimum support for the infrastructure, buildings, hardware repairs at the college. And then, all right, how about a public service announcement? How about a public service announcement from Gary Stocker to those either already at Keystone? You have my sympathies. My public service announcement: think carefully. Think carefully, those considering Keystone, before committing to this college. Hey, how about a wrap?

Financial transparency. I've talked about it both specifically and generically over the last many, many months in many, many shows. Colleges, colleges are really good at hiding their financial health. Especially if it's bad. And even the financially strong colleges rarely— and I don't know why— rarely tout that advantage. During our weekly College Financial Health Show every Tuesday, 10:30 AM Central, Matt Hendricks and I always look forward to reviewing those financially strong private colleges. There are many, but there are certainly lots lots worth considering. And I regularly ask the question of myself and others in my business world: am I too aggressive? Too aggressive with my highlighting and critiques of individual colleges? Not just higher education in general, but individual colleges. My business model is based on selling the College Viability app and the College Majors Completion app. Both to colleges, college leaders, boards, banks, bondholders, and to students and their families. I know the second group is grateful for my critiques and suggestions. The first group, as you might imagine, much less so, although I do have many college leaders encouraging me to keep the pressure on. And I guess the best way to describe the higher education market now is that it is in financial and operational, and since January 20th, policy turmoil. Not for every single college, but for way, way, way too many. And there's continuing need, a continuing need for an alternative media source for higher education to stay on top of that turmoil and share it with readers and with listeners. Here, here at College of Viability, I will do my continuing best to properly and fairly be that alternative media source. Hey, thanks again as always for making time to listen to the podcast. I'll be back next Monday with another episode of This Week in College Viability. I'm Gary Stocker. Thanks as always. We'll talk next week.